Welcome again to the 2024 Democratic Business Summit.
Last year, we were in Manchester talking about the need for government to take democratic business more seriously, and taking a bet on there being an interest across different movements for democracy in business to actually come together to promote how our approaches to business ownership can transform our broken economy.
Now, for the second year of the Summit, we're here in Cardiff, with a new supportive government, a policy commitment to double the size of the co-operative and mutual economy, and the creation of a new council to represent us within government.
Despite a natural hesitation, it feels that there’s a significant and historical opportunity to take advantage of this new policy, and make sure our wider movement informs how the government supports our sector, as well as making the most of the general positivity about co-operatives and mutuals for probably the first time in a generation.
There is no clear consensus on the best metric, but it definitely feels that this is not about simply increasing the number of businesses, but about increasing the quality of employment, services, and infrastructure in our economy. Though quicker routes to sectoral growth may be attractive in terms of meeting targets, what may be the easiest way of achieving such growth, will probably not be the most impactful.
But, let’s remind ourselves of why doubling the size of our business movement matters in the first place?
Last year, the think tank Ownership at Work led a research partnership to publish a Knowledge Programme, which establishes a new baseline in our understanding of our scale and impact, contrasting democratic with non-democratic businesses for the first time.
What did it find?
- Our businesses are 8%–12% more productive
- Our businesses tend to have a higher minimum annual wage by around £2,900
- Our businesses are five times less likely to make employees redundant
The evidence is there, we just need to use it more effectively in national and local debates about economic development.
What are some of the routes to scale? What business development growth models will be important to this process?
For most of the last 30 years, the UK’s democratic business movement has largely been characterised by the creation of new microbusinesses, entities that are most likely to remain relatively small as employers and in terms of their turnover.
But, alongside new businesses, where else could we invest in development?
- Business conversions have been one of the positive stories of the last decade, particularly with the Trust model. We know we’ll see more and more growth with this model, but what are other parts of the democratic business movement that could take advantage of this market opportunity, and what policy support do we need to achieve this?
- Business restarts rarely happen in the UK – compared with European countries – where redundant workers pool their redundancy pay and/or borrow money to capitalise the business so that it can continue to operate. What can we do to make this option more visible to the UK workforce, so it’s a process led by the employees themselves, and what policy changes do we need to encourage it?
- And then there’s Franchises. This model represents a useful route to scaling businesses and, most importantly, to create an easier path into business ownership for those unlikely to start their own enterprise. We’re seeing this model develop in places in the US, particularly in low-income parts of the economy, which have generally been ignored when compared with more professional sectors.
We also need to ask what parts of the economy do we actually want to grow in?
There are parts of the foundational economy, like renewables and retrofit, where we know we can expand and replicate through and beyond the government’s Local Energy Plan.
The demand for housing and an unrelenting crisis presents opportunities to expand and replicate community and tenant managed models from our sector.
And we can’t also ignore our social infrastructure – the music venues, pubs, laundrettes, community centres, and skateparks, this is where we need to introduce democratic models to manage these vital spaces and services.
But really there are no sectors where democratic business models would not improve the individual and collective experience of work.
Can we do all of this without a strong ecosystem of specialist advice and peer support? The answer is obviously no, but it still feels like one of the most underinvested parts of our whole movement.
The last time the sector doubled in size – during the 1970s – there were more than 90 local government funded Co-operative Development Agencies. Today, there is just half of that number, and the advisor base is facing its own succession issues as many are retiring without replacing themselves.
We need more specialist advisors. This is both retraining mainstream advisors on democratic options, as well as rapidly rebuilding our numbers by training more barefoot advisors – those with direct experience of working in our businesses in many different sectors.
We need more and better funded development agencies, including more effective collaboration between the agencies themselves, such as new regional bodies like West Midlands Ownership Hub, or with national partners like Centre for Democratic Business and Co-ops UK.
And we need more and better funded business networks and events – new or transitioning businesses don’t only rely on technical support – they are often inspired by other business leaders and community groups.
So, what can we do?
- Let’s mobilise the evidence to support our augment of why democratic models for business & asset ownership are best placed to deliver long-term inclusive growth
- Let’s properly invest in R&D to deliver on opportunities for influencing the succession market, encouraging workers to restart closed businesses, and test the appetite for developing franchise models out of successful businesses in our sector
- Let’s put more time into defining what parts of the economy should be our focus for growth, making sure they’re not just based on the government’s priorities, but where the market is strong, and the social need is high
- And finally, invest in the support ecosystem – we won’t get anywhere close to this ambitious target without putting resources into the agencies and networks that give specialist advice, and that will build the pipeline for a new generation of democratic businesses in our local and national economies over the next 5-10 years.
I’m excited about today’s event and now going to introduce the panel who are exploring the ‘power of democracy in business’:
We have:
- Lucy Humphrey of Leading Lives
- Kosta Juri of Institute for Economic Democracy
- Oliver Allies of Wavehill
- Derek Walker, the Future Generations Commissioner for Wales
